Approval for Vectren's natural gas-fired power plant still pending

The smokestacks of Vectren's (soon to be CenterPoint Energy) A.B. Brown Generating Station can be seen in the distance behind its coal ash pond in Posey County near Evansville. The utility is still waiting Indiana regulatory approval for a new natural gas power plant to replace the aging coal-burning plant.(Photo: MARLENA SLOSS / COURIER & PRESS)

The merger itself will not affect the regulatory process, said Natalie Hedde director of corporate communications for Vectren.

The utility is seeking a certificate of public convenience and necessity from the Indiana Utility Regulatory Commission for approval to build it.

The state commission is charged with ensuring utilities provide reliable service and fair rates. Vectren filed its request in February 2018 and there have been multiple hearings on it. A decision will not happen until some time after Feb. 22, said Stephanie Hodgin IURC spokeswoman.

That is Vectren's deadline to respond to hundreds of pages of documents filed by opponents in January making additional arguments for denying it and outlining how they want it resolved.

Once the commission has Vectren's response, it will need additional time to review it, Hodgin said.

Vectren wants to retire its A.B. Brown Generating Station, located near the Ohio River in Posey County, southwest of Evansville, as well as most of its F.C. Culley plant in Warrick County.

It would replace Brown's two 245-megawatt generating untis and one 90-megawatt unit at Culley with a proposed 800- to 900-megawatt natural gas-fueled power plant. It would be built at the A.B. Brown location.

The project would cost an estimated $781 million. In addition, Vectren is also to spend $95 million to update and extend the life of another coal-burning unit at F.C. Culley.

If it is approved, Vectren will have to return to the IURC after it is built to make a separate request to recover the cost with a rate increase.

The proposed power plant has drawn opposition from consumer and environmental advocates, including Citizens Action Coalition, Sierra Club and Valley Watch, but also from the Indiana Coal Council.

One objection has been how the project's cost will affect ratepayers. Vectren residential customers' bills are the highest in the state according to the IURC's annual customer bill surveys.

Vectren's outgoing CEO Carl Chapman said in an October hearing that the utility held rates at just a 0.28 percent increase since 2011 but he had also warned customers rate increases would be coming.

"We've said forever, there will be a large increase coming," he said.

This will include an already-approved, but deferred, rate increase to pay the cost of mercury pollution controls installed at the coal-fired power plants — facilities the utility now wants to retire from use.

In addition, in 2017 the IURC approved Vectren's request to spend up to $51 million to install new smart meters in homes. Vectren has said it would likely seek a rate increase for the smart meters in 2023 or after.

Chapman testified in the October hearing that Vectren needed the plant to diversify its sources of energy generation away from coal and that it would reduce carbon emissions an estimated 60 percent.

However, opponents have argued natural gas is still a fossil fuel like coal and that other utilities are doing more to shift to renewable resources such as solar and wind energy.

Opponents also argue that Vectren did not explore other inexpensive alternatives, such as seeking bids to see if it could obtain the needed energy capacity from alternate suppliers.

The Office of Utility Consumer Counselor, which represents the public interest in cases before the utility commission, also asked the commission to reject Vectren's proposal. It argued the project was too large and that the company did not consider less expensive options.